Global airlines fear oil rally as losses mount

By Sara Webb and Raju Gopalakrishnan

KUALA LUMPUR (Reuters) - Global airlines called for concerted action to prevent another runaway surge in oil prices as the International Air Transport Association nearly doubled its forecast for industry losses to $9 billion in 2009.

The head of the Geneva-based airline lobby on Monday lambasted "greedy speculation" in oil markets and accused governments of squandering money raised from aviation while carriers suffer from still slumping demand.

"Our industry is in survival mode," IATA Director General Giovanni Bisignani told the aviation body's annual meeting in the Malaysian capital.

"I am a realist. I don't see facts to support optimism," he said. "This is the most difficult situation the industry has faced."

However, John Leahy, commercial director at European aircraft manufacturer Airbus, said that while 2009 would be tough, plans by United Airlines to order as many as 150 new planes from Airbus or rival Boeing Co showed the market was starting to turn around.

"Cancellations are not as much of an issue as deferrals. I don't think we'll have that many more cancellations," Leahy told Reuters in an interview.

OIL PRESSURE

IATA, the voice of more than 200 airlines, has repeatedly warned of a grim year for carriers as global recession shrinks passenger demand and weak financing drives down cargo trade.

IATA's latest figures helped send airline stocks lower in morning trading on the New York Stock Exchange. The Amex airlines index fell 3 percent.

In Europe, airline stocks underperformed a weaker market and fell up to 4 percent after IATA revised its 2009 industry loss forecast from its March estimate of $4.7 billion.

"Investors in the airline industry are so sensitive to any new data point that may change the outlook or prospects for recovery," Majestic Research analyst Matt Jacob said of the IATA data.

"Very often those incremental data points can have a big impact in airline valuations even if they do not necessarily represent a big change in forward looking expectations for most investors."

The new IATA estimates confirm the difficulties the airline sector is going through due to the slump in passenger traffic since end-2008, Harald Liberge-Dondoux of CM-CIC Securities said in a note.

Conditions have worsened after the outbreak of H1N1 flu caused a worldwide health scare and as oil prices -- until recently a sole bright spot on the horizon after peaking near $150 a barrel last year -- climb again.

Prices for jet fuel in Singapore have jumped almost 60 percent since bottoming out at $46 a barrel in March.